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Amazon Offers Discount to Low-Income Customers

Posted on June 06, 2017 by Rachel Dovey in Uncategorized

An Amazon fulfillment center (Photo by Chris Watt)

Following the high-profile announcement that it would dedicate 50,000 square feet of space for a homeless shelter at its Seattle headquarters, Amazon is giving philanthropy another go — this time with an offer that will probably help the e-commerce giant up its customer base.

A new price break on Amazon Prime will go to customers receiving food stamps and other government assistance, CBS reports.

Customers who receive benefits such as the Supplemental Nutrition Assistance Program … can pay $5.99 per month for membership, which would include free shipping and unlimited streaming of movies and TV shows with Prime Video. The regular annual membership is $99 per year. But those who cannot afford to pay up front have to pay $10.99 a month for the same benefits.

CBS points out that it’s probably a savvy business move for Amazon — the Prime program has created “strong habits among shoppers as competition is keen.” It has so far been popular with upper-income households, with the fastest-growing user demographic earning over $112,000 a year.

Amazon’s homeless shelter announcement, which was made last month, followed a spate of not-so-great press for the corporate giant, especially in Seattle. At the time, Business Insider pointed out that the move would likely buy some media goodwill for a company “that anti-gentrification activists have criticized … for driving up real estate costs and making downtown less diverse.”

Amazon’s checkout-free grocery store pilot, which began testing last year, received mixed reactions. As Jen Kinney wrote for Next City in December, the store raised equity concerns because it would likely employ fewer people and be targeted only at those with access to a credit card.

“[W]hile many are praising the store’s technology as revolutionary, others are concerned about the erasure of jobs, the growing surveillance state and the creation of an increasingly unequal society in which human interactions are kept to a minimum,” she wrote.

Amazon has also been criticized for the tax breaks it receives — because the positions it offers tend to pay half the wages of traditional manufacturing jobs. It also receives city-level subsidies, like the $100,000 forgivable loan it was gifted by the city of Baltimore in 2015 to pay for shuttles.